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Sat, Jul 04, 2009 - 10:06 AM EDT  —  AAPL: 140.02 (-2.81, -1.97%)  |  NASDAQ: 1796.52 (-49.20, -2.67%)

Report: Apple nearing iTunes video rental deals with Warner Bros, Paramount, Lionsgate
Monday, January 07, 2008 - 10:18 AM EDT

"It has been Hollywood's worst-kept secret: Steve Jobs is starting to win over the film industry," Ronald Grover reports for BusinessWeek.

"Jobs and most of the big studios are nearing compromise on key sticking points that have prevented iTunes from offering most of the new and old movie titles consumers see at Blockbuster, Netflix, and Wal-Mart Stores. Studio executives, forced into silence by Apple's ultra-uptight nondisclosure agreements, aren't talking, and neither is Apple," Grover reports.

"BusinessWeek has learned that Apple is close to nailing down agreements with most of the big studios, though not all may be ready to announce by the time Jobs takes the stage on Jan. 15 at the annual Macworld Conference & Expo in San Francisco," Grover reports.

"A breakthrough with the movie studios could provide a badly needed boost for Apple TV, which has been roundly criticized for shortcomings beyond iTunes' limited film selection. The device, which streams video and music on a home computer's hard drive to a TV or home theater, suffers from poor audio and visual quality compared with rival products," Grover reports.

MacDailyNews Take: Wrong. Apple TV's so-called "shortcomings" stem from Hollywood's refusal to allow iTunes to offer higher resolution content. Apple TV is capable of high definition video (H.264 and protected H.264 (from iTunes Store): Up to 5 Mbps, Progressive Main Profile (CAVLC) with AAC-LC audio up to 160 Kbps (maximum resolution: 1280 by 720 pixels at 24 fps, 960 by 540 pixels at 30 fps) in .m4v, .mp4, and .mov file formats, MPEG-4: Up to 3 Mbps, Simple Profile with AAC-LC audio up to 160 Kbps (maximum resolution: 720 by 432 pixels at 30 fps) in .m4v, .mp4, and .mov file formats) and supports audio formats AAC (16 to 320 Kbps); protected AAC (from iTunes Store); MP3 (16 to 320 Kbps); MP3 VBR; Apple Lossless; AIFF; and WAV. Feed today's Apple TV with high quality content and that's what you'll see on your big screen.

Grover continues, "The Financial Times reported on Dec. 26 that Apple has already signed an agreement with at least one studio, Twentieth Century Fox, to offer rental downloads of its movies. Now sources tell BusinessWeek Apple is nearing deals with Warner Bros., Paramount Pictures, and Lionsgate to allow movie sales, rentals, or both through iTunes."

"Sources say Apple plans to charge $3.99 a pop for 24-hour rentals," Grover reports.

"Sources say Warner Bros. and Paramount are mulling agreements that would allow both sales and rentals. Fox has already agreed to offer both, but only the rental deal is set to be announced Jan. 15; the two sides are working out final details on the sales arrangement. Lionsgate, meanwhile, is considering a deal to let Apple also offer its films for rental. Even Sony, a longtime Apple rival in consumer electronics, is said to be contemplating a deal to sell its movies through iTunes. Among the major studios, only Universal, whose parent company NBC (GE) has yanked its TV shows from iTunes over a pricing dispute, is not discussing a movie deal with Apple, according to sources," Grover reports.

"Jobs wants new movies available for download 'day and date' with DVD releases so that iPod users can rent them the same day the DVDs become available at... other rental venues," Grover reports.

More details in the full article here.


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Jan 07, 08 - 11:26 am Comment from: Macromancer

Do tech writers actually know anything about tech?

Jan 07, 08 - 11:27 am Comment from: NeverFade

wow! Now I need an Apple TV...

Jan 07, 08 - 11:41 am Comment from: I love glossy

$3.99 for 24hr rental? No way.

Jan 07, 08 - 11:43 am Comment from: Webbyswim

Yaaawhooooooo!

Jan 07, 08 - 11:43 am Comment from: M.X.N.T.4.1

To be honest I don't see anything moving me from my netflix type deal. Unless 24hr rentals are less then a quid it just isn't worth it. If I wanted to see films urgently I would go to the cinema but I don't, I wait for them to come on dvd and watch them at my leisure.

Jan 07, 08 - 11:46 am Comment from: Dave Smith

3.99 is to much. Not gonna go there...

Jan 07, 08 - 11:48 am Comment from: silverhawk

What's happening with the market today?

Jan 07, 08 - 11:51 am Comment from: Dave

3.99 for movie rentals is way too much. If the resolution of TV shows is increased and writers go back to work I might start buying season passes. Otherwise, I'll stick with Netflix for all.

Jan 07, 08 - 11:56 am Comment from: Ampar

" . . . only Universal, whose parent company NBC (GE) has yanked its TV shows from iTunes over a pricing dispute, is not discussing a movie deal with Apple . . ."

It's their loss.

And a rental for $3.99 for 72 hours would be more reasonable.

Jan 07, 08 - 12:00 pm Comment from: flappo

i'm going to sell my 360 , hd drive and all the films when this thing comes out

using the pos makes me feel dirty

Jan 07, 08 - 12:07 pm Comment from: Zune Tang®

What's happening with the market you ask? Presently AAPL is down $7.56.

That's right, MAC sheep, Bill Gates' CES keynote clearly demonstrated Microsoft's ability to innovate and deliver top quality, customer focused products is destroying any chance for Apple to succeed. Again. The market and 97% of computer users get it, I don't know why you MAC lemmings don't get it.

Your potential. Our passion.™

Jan 07, 08 - 12:13 pm Comment from: DJ

Like the option to buy -- I'm a collector so would like that option for specialist stuff.

Maybe I'll be in the market for an ATV yet!

Jan 07, 08 - 12:19 pm Comment from: Jubei

Apple TV is more than capable of HD. Where do these techwriters get their data from? Enderle, Thurrott, OU, Dvorak??? If so, its no wonder the get all the data wrong. LOL

Jan 07, 08 - 12:24 pm Comment from: Helloooooo

um, i think the 24-hour window is from when you first begin to view the video - not from when you start or complete the download...

Jan 07, 08 - 12:26 pm Comment from: MacSheikh

@ Zune Tang

I see you're keeping tabs on your AAPL holdings... grin

Jan 07, 08 - 12:29 pm Comment from: Think

What many tech writers don't realize it this only works with HD TVs. I was going to buy one until I read the specs and noticed it will not work with my good old standard TV.
Until I and many others upgrade to HD TV, this is of no use. Once the tipping point of new TVs is reached, then this will sell.

Jan 07, 08 - 12:30 pm Comment from: Scott

I'll take rentals in 720p. My TV upconverts it to 1080p anyways.

Jan 07, 08 - 12:33 pm Comment from: money talks

According to ComputerWorld, your figures are incorrect Zune Tang.

"January 02, 2008 (Computerworld) -- Mac's market share reached 8% during the last two days of 2007, a record mark that a Web measurement company yesterday called "phenomenal."

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9054798&source=rss_news50

Jan 07, 08 - 12:33 pm Comment from: AAPL

Time Warner Cable chargers $4.99 for 24hrs

here in NYC

Jan 07, 08 - 12:35 pm Comment from: Luke Skywalker

Content needs to be delivered as 720 video (at least) and 5.1 surround. Right now, the lack of these makes the ATV a less-than-desirable device for most people. If it happens, get ready for some serious bandwidth use...

Jan 07, 08 - 12:36 pm Comment from: Luke Skywalker

@Think:

The ATV will work with any TV that has composite video inputs, even SDTV (which is what we have).

Jan 07, 08 - 12:37 pm Comment from: dance dance Monkeyboy

Really hoping this "24 hour rental" business is bunk. I should think it would not be too hard for Apple to create some kind of "queue" system along the lines of Netflix- keep 1, or 3 films as long as you like 'til you "return" them in iTunes. D.E.G. over at Roughlydrafted.com had a nice article recently about how it might work.

Given how many hours it can take to download a film, 24 hours sucks. It seems very un-Apple to dictate such inflexible terms.

Magic word: ball. "That which is now in Apple's court."

Jan 07, 08 - 12:39 pm Comment from: HD Boy

Zune Tang®:

So, why do your bosses at Microsoft feel it is so important to finance your Apple disinformation (and dirty tricks) campaign?

Copying Apple's hardware and software isn't enough?

Jan 07, 08 - 12:44 pm Comment from: Geo

Remember, once Apple's downloads take off, your ISP (especially cable company Internet services) will be raising rates and/or enforcing caps on monthly download bandwidth. That $3.99 movie rental will cost more...

It may be time to dump cable companies as Internet Service Providers...

Jan 07, 08 - 12:57 pm Comment from: Luke Skywalker

@Myself!!! - Sorry, that should have been COMPONENT inputs.

Jan 07, 08 - 01:05 pm Comment from: MacMarc

Hey Zune! How's your sister, Poon, doing?

@I love glossy & @Ampar:
The 24 hour limit will start from the first time you hit play not from purchase. Word is that you can rent a movie, wait a week or two, press play, and THEN you have 24 hours to screen the film.

Jan 07, 08 - 01:24 pm Comment from: Ampar

To MacMarc: That makes sense. Thanks.

Jan 07, 08 - 01:44 pm Comment from: HolyMackerel

How about a question at the end of the rental watching:

"Did you enjoy this movie enough to buy it? We'll take the $3.99 rental price off the purchase price of $9.99 and its your to keep".

No need to download it a second time.

Jan 07, 08 - 01:50 pm Comment from: Demon

The Apple TV Video Output is HDMI and Component (R-G-B). It will work on a standard Def TV with RGB Component input (or a standard DVI monitor). The Apple TV also works great on DVI monitors with a HDMI to DVI Cable (standard and Widescreen monitors). If you use the optical Audio Output or the HDMI Audio the Apple TV will send the ProLogic 5.1 digital encoded audio to the audio processor device. The Analog Stereo output however are not capable of 5.1 audio. The Apple TV lacks the 5.1 Digital to Analog processor chip to send the discrete analog signals to an older type 5.1 analog per-amp that used just Left/Right analog inputs for the 5.1 audio signal. If you have a receiver with Optical inputs or HDMI pass through/switching then you should get 5.1 sound from the AppleTV.

Jan 07, 08 - 01:54 pm Comment from: Ampar

Or alternatively:

"Did you hate this movie enough to want to slap the living crap out of its writers, actors and producers? We'll see what we can do."

No need to watch trailers from that bunch again.

wink

Jan 07, 08 - 02:10 pm Comment from: jg2000

@ Zune Poon

We may be the 'sheep', but you've always been the one with the wool being pulled over your eyes.

Our Dominance, your Dumbness

Jan 07, 08 - 02:20 pm Comment from: cogitoergomac

AAPL is right. Here in the Bay Area, Comcast charges 3.99-5.99 for a 24-hour PPV. So the alleged Apple price target is quite market-realistic.

Jan 07, 08 - 02:34 pm Comment from: effwerd

It needs to be repeated: $3.99 for 24 hours is too much (money) and not enough (time).

Jan 07, 08 - 02:51 pm Comment from: Falkirk

I think a 24 hour time limit will be OK. Based upon my current experience, I suspect you'll be able to order a film and start watching it within 15 to 30 minutes as it streams to your Apple TV. Of course, I won't know this until we actually have real time results. Assuming that's the case, it will almost allow "instant gratification" and most people will download and watch the movie that very night.

Of course the price is just a rumor, but it gives me pause. Netflix and Blockbuster appear to be cheaper though less convenient. I'm guessing Apple could charge $3.99 and get away with it. But if they could lower the price to say $2.00, they'd destroy the competition. It'd be the only way to rent movies.

Jan 07, 08 - 03:00 pm Comment from: Chuck U Farley

Tonight I have to return 2 new releases that I rented from RedBox.
At $1 per day per movie, it will cost me $4 for the two as compared to almost $4 for 1 movie for 1 day on iTunes (if the rumor machine turns out to be true). Plus I got to see the extras, and more importantly, Handbrake the 1 I did not have time to finish so I can watch it when I want.
$3.99? No way!
However, I am sure I will use it every now and then when I want to see something but do not want to go get it.

Jan 07, 08 - 03:35 pm Comment from: Luke Skywalker

@Demon:

The ATV cannot do 5.1 because it would require passthrough of DD or DTS from the media through the optical or HDMI ports to an amp that can decode the signal. Pro Logic is, at best, a 5-channel matrix surround, and it can be sent over optical, HDMI or stereo lines. The ATV does do this, but it still cannot do 5.1 because Quicktime (which drives the ATV) does not support passthrough. Hopefully Apple will fix this for the ATV (and provide content encoded in DD, DTS or some other format with the LFE) in a software update.

Jan 07, 08 - 07:41 pm Comment from: KenC

72 hours makes more sense, as it allows you to watch it over the weekend, the most likely time to rent. Also, it's what many customers are used to with Blockbuster, etc. However, what would be truly progressive is if they allowed a Netflix type model, where you get to keep the rented movie until your next rental.

Jan 07, 08 - 09:23 pm Comment from: another Scott

Hey ZT... <<The market and 97% of computer users get it>> should read 93% and falling.

Jan 08, 08 - 12:48 am Comment from: TheConfuzed1

Two things:

1. The 24 hour restriction is a major reason why I don't buy pay-per-view rentals. If it is a digital download, there is no reason why it should be restricted to such a short amount of time, as there is no physical media to be exchanged. 30 days makes more sense for this purpose.

2. I would rather subscribe to an unlimited download plan, similar to what Netflix offers now.

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